Goldman Sachs Fraud... no **** Sherlock!

[nomore4s]

Goldman Sachs was a major cause in the Financial Crisis and they again screw the world and me today. Look at the DOW down 1.13% and ASX200 down 1.5%. Fraud or not it has cost current shareholders a motza....

Didn't hear too many shareholders complaining when these companies caused the massive bubbles to inflate, funny how we only ever here any complaints when they finally pop

 

[nunthewiser]

Personally think this ones just the tip of the iceburg.

profit from it , lose from it , whinge about it.....its how money changes hands, not a lot you and i can do about it apart from go along for the ride.

 

[Whiskers]

My thoughts on these class actions (and we have had them in Australia) is that doesn't the legal system create a 'moral hazard' for investors by allowing them to be bailed out via civil proceedings? It is a similar argument than for corporations being bailed out by the government.

I tend to agree with the general thrust of this, that greedy wreckless investors chasing a quick buck adding fuel to the fire deserve to pay for their wrecklessness...however always on the basis of playing within the law to protect the integrity of the system. Shareholder risk and 'Caveat emptor' doesn't, or at least shouldn't, dissolve the vendors responsibilities to honesty and truthfulness.

To put an opposite point of view to this, if GS have acted illegally, then investors can argue they were mislead and have a right to compo.

I do agree that if GS have done something illegal they should be punished, and so should investors who make poor decisions, but if those poor decisions are based on illagal discloures then they should have a right to some money being returned, similar to breach of contract etc

Yes, I agree. Common Law negligence and fraud basically provides recourse.

The dictionary describes FRAUD as:

fraud   /frɔd/ Show Spelled[frawd] Show IPA
–noun
1. deceit, trickery, sharp practice, or breach of confidence, perpetrated for profit or to gain some unfair or dishonest advantage.
2. a particular instance of such deceit or trickery: mail fraud; election frauds.
3. any deception, trickery, or humbug: That diet book is a fraud and a waste of time.
4. a person who makes deceitful pretenses; sham; poseur.

If our courts applied the above to the CEOs and directors of listed and unlised property, mortgage and investment funds the government would have to build new courts to conduct the cases due to the many being charged. Why are our regulators lacking balls...........

However the legal definition and criteria for Fraud (and negligence) is somewhat different to the general dictionary meaning. The following is probably a fairly accurate definition of the US legal meaning.

Fraud: A false representation of a matter of fact””whether by words or by conduct, by false or misleading allegations, or by concealment of what should have been disclosed””that deceives and is intended to deceive another so that the individual will act upon it to her or his legal injury. http://legal-dictionary.thefreedictionary.com/fraud

The problem often comes down to, as I understand this case will, to "by concealment of what should have been disclosed" with so much fine print in share and general property dealings purporting or implying indemnities.

As I understand it, GS have previously (since the GFC) acknowledged what is alleged by the SEC 'concealment of what should have been disclosed' on the premise that they (GS) did not have to disclose it... hence some pretty powerful lobbying to try to stop it going to court.

 

[Scalper23]

The usual thing to do in the market when a bank rings you with a deal is look at the other side and take the opposite view. They would not sell it if it was a good deal. How our hedge funds got suckered into these deals is beyond me. When an overseas bank rings Australia to peddle securities doesn't that set off alarm bells.

 

[Naked shorts]

The usual thing to do in the market when a bank rings you with a deal is look at the other side and take the opposite view. They would not sell it if it was a good deal. How our hedge funds got suckered into these deals is beyond me. When an overseas bank rings Australia to peddle securities doesn't that set off alarm bells.

No because GS is an investment bank, its their job to match up investors with investments. They've been doing it for 150 or so years fyi

And regardless, GS has offices in Sydney and Melbourne (and I think a really small one in Brisbane), you are incorrect in implying it was an overseas bank calling Australia.

 

[Scalper23]

No because GS is an investment bank, its their job to match up investors with investments. They've been doing it for 150 or so years fyi

And regardless, GS has offices in Sydney and Melbourne (and I think a really small one in Brisbane), you are incorrect in implying it was an overseas bank calling Australia.

The urgency for the trade came from US executives, according to the media.

In my experience in bond markets over the years, you just need to be carefull of deals that are been rushed. And yes this stuff has been going on for a long time.

 

[Naked shorts]

In my experience in bond markets over the years, you just need to be carefull of deals that are been rushed.

Yes thats the same with any deal, buts its not like GS was selling this stuff to old disabled grandmothers with alzheimer's. The Australian Hedge fund lost out because of their own sheer incompetence, nothing more nothing less. They WILLINGLY risked their money in hope of a gain, turns out they didn't do enough research and they lost out. Typical case of losers b*tching about winners.